The European Commission took the case due to the levels of trihalomethanes in drinking water - which are used to remove bacteria.
Europe's highest court says drinking water in Ireland exceeds safety levels.
The Court of Justice says the state failed to meet its obligations on directives.
The court found levels of certain chemical compounds in Irish tap water are both damaging to human health and to the environment.
The European Commission took the case due to the levels of trihalomethanes in drinking water - which are used to remove bacteria.
They can also cause stomach problems and skin irritation.
The case dates back as far as 2014 when Irish Water - now Uisce Eireann - had been asked to ensure drinking water met standards.
Today's findings relate to 21 public water supplies and nine private group schemes.

Vacuum-Packing Machine Lid Killed Worker As Kildare Town Firm Faces Court Over Second Fatality
Water Test Failure Disrupts On-Base Military Training At Curragh Camp
Government Told Grok Clothing-Removal Feature Has Been Disabled Worldwide
Kildare North TD Says He Acted Immediately To Repay Pension Overpayment When It Came To Light
Maynooth Study: Pet Loss Causes The Same Level Of Grief As Losing A Loved One
Kildare TD James Lawless Pays Back Following Pension Error While Martin Heydon Unaffected
Up To €1,000 Available For Kildare Parent And Toddler Groups
Driving Instructor Says Faded Road Markings In Naas Linked To Learner Drivers Failing Tests